Help to Buy London: Your experience on equity loan calculator

Thisismichalis

Hello,

I'd like to ask anyone's experience with regards to the Help to Buy London scheme affordability. Are they strict about the debt-to-income ratio being max 45%?

I am playing around with the equity loan calculator spreadsheet and although my salary and deposit are high enough for me to get a mortgage and pay more than 5% as a deposit, the very high interest rate they have (4.8%) does not bring me in the 45% threshold. The actual interest rate I get from the banks is much lower, so why have they stuck to that high rate?

I am currently at 56% and in order to drop this down I need 3X more deposit (15%) and a significant salary increase. However, with new-build 1-bed flats in London averaging about £350-£400K and deposit savings of around £20K-30K I doubt I’ll ever be able to buy my first home.

Anyone having experience with this or or any work around it?



Thanks

kingstreet

4.8% is used as rates are currently incredibly low and an average over 25 to 30 years is closer to 5%.

You are unable to proceed with any red lights.

If you need to turn off a red light, you need to extend the term, increase the deposit, reduce the purchase price etc.